The European debt crisis has reignited debates about finance's power and the complex relationship between capitalism and democracy in a globalized context. This book tackles a puzzling question: why do heavily indebted countries continue to service their international debts despite frequent crises and significant repayment costs? Jerome Roos conducts a thorough investigation into the political economy of sovereign debt and international crisis management. He traces the evolution of public borrowing from the Italian city-states to the imperialist era's gunboat diplomacy and the sovereign defaults during the Great Depression. The narrative includes the debt crises of developing nations in the 1980s and 1990s and provides fresh insights into recent Eurozone turmoil, particularly Greece's 2015 capitulation to European creditors. Through detailed case studies of contemporary debt crises in Mexico, Argentina, and Greece, the book reveals the troubling rise of global finance. It illustrates how the transformation of the capitalist economy over the past four decades has granted private and official creditors unprecedented power over heavily indebted nations, allowing them to impose harsh austerity measures and enforce continuous debt service during crises, leading to severe social repercussions and significant implications for democracy.
